WINNIPEG, MANITOBA--(CCNMatthews - Nov. 22, 2006) - HudBay Minerals
Inc. ("HudBay") (TSX:HBM) today announced that its wholly-owned
subsidiary, Hudson Bay Mining and Smelting Co., Limited ("HBMS"), has
commenced a cash tender offer for any and all of the approximately
US$45.1 million aggregate principal amount of HBMS' outstanding 9 5/8%
Senior Secured Notes due 2012 (the "Notes") on the terms and subject to
the conditions set forth in its Offer to Purchase and Consent
Solicitation Statement, dated November 22, 2006, and the related Letter
of Transmittal and Consent. HBMS is also soliciting consents to amend
the indenture governing the Notes in order to eliminate most of the
restrictive and affirmative covenants and certain events of default. The
tender offer and consent solicitation documents more fully set forth
the terms of the tender offer and consent solicitation. The tender offer
will expire at 12:00 midnight New York City time, on December 20, 2006,
unless extended or earlier terminated by HBMS. HBMS reserves the right
to terminate, withdraw or amend the tender offer and consent
solicitation at any time subject to applicable law.
"The tender offer represents a continuation of our previously
announced intention to re-purchase the notes," said Peter Jones,
President and CEO. "We believe it is beneficial to shareholders to
utilize our available cash to re-purchase the balance of the outstanding
notes and reduce our overall leverage."
The total consideration for the Notes tendered and accepted for
purchase pursuant to the tender offer will be determined as specified in
the tender offer documents, on the basis of a yield to the first
redemption date for the Notes (January 15, 2009) equal to the sum of (i)
the yield (based on the bid side price) of the 3 1/4% U.S. Treasury
Security due January 15, 2009, as calculated by Credit Suisse Securities
(USA) LLC in accordance with standard market practice on the price
determination date, as described in the tender offer documents, plus
(ii) a fixed spread of 50 basis points. Each holder who validly tenders
its Notes and delivers consents on or prior to 5:00 p.m., New York City
time, on December 6, 2006 will be entitled to a consent payment, which
is included in the total consideration set forth above, of US$30 for
each US$1,000 principal amount of Notes tendered by such holder if such
Notes are accepted for purchase pursuant to the tender offer. Holders
who tender Notes after this consent date but prior to the expiration of
the tender offer will receive only the tender consideration, which is
equal to the total consideration less the consent payment. All holders
whose Notes are tendered and accepted for purchase will also receive
accrued and unpaid interest up to, but not including, the payment date.
Holders who tender Notes are required to, and will be deemed to,
consent to the proposed amendments to the indenture. Any tender of Notes
prior to the consent date may be validly withdrawn and consents may be
validly revoked at any time prior to the consent date, but not
thereafter unless the tender offer and the consent solicitation are
terminated without any Notes being purchased.
HBMS expects to pay for any Notes purchased pursuant to the tender
offer and consent solicitation with available cash on hand promptly
following the expiration of the tender offer. In addition, HBMS may
accept and pay for any Notes at any time after the consent date, in its
sole discretion.
HBMS' obligation to accept for purchase, and to pay for, Notes
validly tendered and not withdrawn pursuant to the tender offer and the
consent solicitation is subject to the satisfaction or waiver of certain
conditions, including the receipt of sufficient consents with respect
to the proposed amendments to the indenture and the availability of
sufficient cash to fund the purchase of the Notes and the related fees
and expenses. The complete terms and conditions of the tender offer and
the consent solicitation are set forth in the tender offer documents
which are being sent to holders of Notes. Holders are urged to read the
tender offer documents carefully.
HBMS has engaged Credit Suisse Securities (USA) LLC to act as dealer
manager for the tender offer and solicitation agent for the consent
solicitation.
Questions regarding the tender offer and consent solicitation should be directed to:
Credit Suisse Securities (USA) LLC at (800) 820-1653 or (212) 538-0652.
Requests for documentation should be directed to:
Global Bondholder Services Corporation at (866) 470-4300 or (212)
430-3774, the information agent and depositary for the tender offer and
consent solicitation.
The tender offer and consent solicitation is being made solely by
means of the tender offer documents. Under no circumstances shall this
press release constitute an offer to purchase or the solicitation of an
offer to sell the Notes or any other securities of HBMS or HudBay. It
also is not a solicitation of consents to the proposed amendments to the
indenture. No recommendation is made as to whether holders of the Notes
should tender their Notes or give their consent.
About HudBay Minerals Inc.
HudBay is an integrated mining company that operates mines,
concentrators and a metal production complex in northern Manitoba and
Saskatchewan. HudBay also owns a zinc oxide production facility in
Ontario, the White Pine copper refinery in Michigan, and the Balmat zinc
mine in New York state. HudBay is a member of the S&P/TSX Composite
Index.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information", within the
meaning of applicable securities legislation. Forward-looking
information includes, but is not limited to, statements with respect to
HBMS' tender offer for any and all of HBMS' outstanding Notes and
matters related thereto. Often, but not always, forward-looking
information can be identified by the use of forward-looking words like
"plans", "expects", or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"does not anticipate", or "believes" or variations of such words and
phrases or statements that certain actions, events or results "may",
"could", "would", "might", or "will be taken", "occur", or "be
achieved". Forward-looking information is based on the opinions and
estimates of management as of the date such information is provided and
is subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance or
achievements of HudBay and HBMS to be materially different from those
expressed or implied by such forward-looking information, including but
not limited to risks associated with the mining industry such as
economics, requirements for additional capital, capital expenditures,
conclusions of economic evaluations as well as those factors discussed
in the section entitled "Risk Factors" in HudBay's Annual Information
Form for the year ended December 31, 2005, available at www.sedar.com, which is also contained in HudBay's Annual Report on Form 40-F, available at www.sec.gov.
Although HudBay and HBMS have attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should
not place undue reliance on forward-looking information. HudBay and HBMS
do not undertake to update any forward-looking information, except in
accordance with applicable securities laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
HudBay Minerals Inc.
Brad Woods
Director, Investor Relations
(204) 949-4272
(204) 942-8177 (FAX)
brad.woods@hbms.ca
www.hudbayminerals.com